Tech stocks are the most important sector of the stock market. For good reason, too.
These companies' innovations create services and products integral to daily life and are upending traditional industries and business models. Investors craving the explosive growth potential of these innovations can look no further than the best tech stocks to buy now.
Technology stocks come in all shapes and sizes, from well-known global enterprises such as Amazon.com Inc. (NASDAQ: AMZN), Facebook Inc. (NASDAQ: FB), and Apple Inc. (NASDAQ: AAPL) to smaller startups just making their IPOs that could potentially offer massive returns to early investors.
That also means the way we evaluate tech stocks has to be different than the way we evaluate the rest of the stock market.
Tech investors are looking for growth. They want a company with a great idea and a management team committed to making it work. As Money Morning Defense and Tech Specialist Michael Robison puts it, "The road to wealth is paved with tech." And it doesn't matter if it's a startup going public or a tech megacap dominating its sector.
But that doesn't mean just any tech stock will see the sort of explosive growth investors want. Tech is extremely competitive, and only the best companies with the best ideas and best management hitting their stride at exactly the right time will make investors money.
That's why we've combed through the most promising tech stocks across the hottest trends in tech to find you stocks with real growth potential.
Here are our best tech stocks to buy today…
We're knee-deep in the fall season. While for many, that means the end of summer and a descent into cold, dark weather, tech stocks will still be hot.
The Fed says they will remain in what they call an accommodative mode, so low interest rates will continue to drive stock prices higher. More people are getting vaccinated, so more stores, restaurants, and venues are opening up. As a result, both individuals and corporations are beginning to loosen the purse strings.
A broad market rise provides the perfect background for owning fast-growing technology company stocks that are developing products and programs that are changing the world in the blink of an eye.
To make sure you don't miss out on any of the fall's hottest stocks, we've got the best tech stocks to buy in October…
Thousands of communications satellites orbiting Earth are prime targets for hackers. The threat here can’t be overstated.
For example, almost every car, truck, train, plane, and ship in the world today uses GPS to track its location, keep to a schedule, and avoid obstacles. And NASA has been the target of more than 6,000 cyber incidents – with 1,785 of those attempted hacks last year alone.
That’s just the tip of the iceberg. Almost every company in the world now uses satellite communications, whether they know it or not.
That’s why Zscaler Inc.’s (NASDAQ: ZS) services are so crucial. The company runs over 150 data centers around the world, which together handle 150 billion transactions per day.
Google does a mere one-tenth that number.
Not only that, but Zscaler is directly at the forefront of securing the huge satellite communications market. It's built out this massive capacity to protect its more than 4,500 clients, which together have more than 20 million employees.
But Zscaler isn’t just a good story. The numbers are great, too.
Since June, Zscaler has beaten the S&P 500 by 450%. This isn’t just a chance occurrence — the stock is up 341.5% over the last two years, beating out the S&P 500 by 563%.
And this innovator is still growing.
Zscaler’s earnings per share soared 114% in its most recent quarter, well above its three-year average of 90%.
This leader in the $17.4 billion market for standby power has already crushed the market since April.
Since then, it gained 36%, beating the S&P 500 by an amazing 227%.
And that’s just the beginning…
Generac Holdings Inc. (NYSE: GNRC) is the first company to create a home standby generator and build an engine specifically for extreme weather. This is a huge market.
Take California, for instance.
California boasts a population of 39.7 million people. And yet in the world’s fifth-largest economy, only 1% of homes have standby power. And by the company’s own estimates, every additional 1% of the American standby power market it captures translates into a whopping $2.5 billion in sales.
That’s on top of the $2.5 billion in net sales this firm scored in 2020, 63% of which came from residential customers like you and me.
In an investor presentation released last month, this Washington state-based energy titan laid out a vision for its growth for years to come.
Between what the firm calls “Grid 2.0,” which will create opportunities in clean energy and grid services, the shift toward work-from-home corporate models, requiring those folks to have some means of backup power, and the ongoing 5G wireless update, this is a very savvy investment.
Generac can grow its main power business and also profit from alternative energy with a system all green homes and businesses will need – convenient and efficient storage.
Since April, the stock has beaten the broad market by 227%. Earnings could grow at a more conservative 24% a year, which means earnings should double in just three years.
That makes GNRC a great backend tech play to power your portfolio for many years to come.
The rollout of 5G networks continues across the globe, and that is the technology development that could have the biggest impact on the world over the next few years. As we have seen in the pandemic, the faster the broadband speeds and the wider the bandwidths are, the better the world functions.
At the heart of the 5G revolution is Aviat Networks Inc. (NASDAQ: AVNW). Aviat sells a range of wireless networking products, solutions, and services in North America, Africa, the Middle East, Europe, Russia, Latin America, and the Asia Pacific.
Maybe that sounds boring, but what they really sell is all the technology that makes the internet work faster and more efficiently, which means the world works faster and more efficiently.
Aviat is the pure-play microwave solutions company for 5G networks. Microwave signals are faster than light through fiber and will be a huge part of major 5G networks.
There is another huge growth opportunity in front of Aviat Technologies right now. The Biden infrastructure plan calls for $100 billion to be spent getting high-speed broadband services to the rural parts of the nations. Aviat has been involved in rural broadband projects for years and stands ready to help build the future in those areas.
That same expertise can help bring the internet to emerging economies around the world, and Aviat expects to see growth opportunities from those markets as well.
Aviat is also the leader in using microwave technology for private markets for utilities, law enforcement, and government agencies.
Aviat has been a steady grower, and the company looks to accelerate that growth as 5G brings broadband to rural America.
Another company that looks poised to blast off is an Israeli semiconductor equipment manufacturer called Camtek Ltd. (NASDAQ: CAMT). Camtek makes products that allow manufacturers to improve yields and drive down costs.
That's critically important right now as semiconductor companies scramble to produce enough chips to meet the demand. Between the pandemic shrinking production and the explosive demand as the global economy comes back to life, we see a shortage of semiconductors around the world. This has brought some industries like auto manufacturing to a standstill.
Manufacturers like Ford are closing plants while used car prices soar. There simply aren't enough new cars to keep up with demand. At the same time, tech firms like Apple are warning that their business could slow down thanks to the chip shortage.
Virtually every social, demographic, and economic trend will drive demand for semiconductors and semiconductor testing equipment like the products Camtek provides. We are moving from the growth of PCs and the internet as the big demand driver for the semiconductor industry into the age of big data.
Big data is smart homes.
Big data is 5G.
Big data is artificial intelligence.
Big data is electric vehicles and driverless cars.
Big data is smartphones.
And big data needs semiconductor chips.
Chip manufacturers need the products made by Camtek to produce the chips quickly, cheaply, and profitably.
Camtek has already been growing at a torrid pace. In the first quarter of 2021, revenues were up year over year by over 90%.
With the second quarter earnings release, the company earned $67.5 million in revenue, an increase of 82% on a year-over-year basis. Camtek beat analyst expectations by 6.74% for earnings per share (EPS) and 5.31% for revenue and has a strong operating cash flow of $19.9 million.
Camtek has doubled revenue every four years.
Wall Street analysts are just discovering the stock and have been scrambling to keep up with Camtek's growth trajectory.
Institutions are starting to notice the stock too. Buyers include well-known growth stock investors like Ark Investments and Driehaus Capital.
The positive earnings surprises, analyst estimate increases, and institutional buying pressure can combine to send stocks dramatically higher very quickly.
Here's what Camtek's management had to say about their strong second quarter earnings report: "Management expects continued growth for the second half of 2021 with revenues for the third quarter to be between $69-71 million, implying over 80% growth year-over-year for the first nine months of 2021."
But the chip shortage is expected to continue into 2023, meaning chip makers will rely on Camtek. Coupled with long-term trends like Big Data, that spells growth for the company over the next two years and beyond.
Bentley Systems Inc. (NASDAQ: BSY) sells software to the people that plan, design, and build infrastructure. These include engineers, architects, and construction firms. As money begins to flow into rebuilding infrastructure, there will be more demand for Bentley's software.
Its software can be used to design bridges, mines, dams, and factories. Architects can also use their products for site plans, rail network planning, and treatment plant analysis. Before the first shovel of dirt is turned in, the designers and builders can have the project all laid out using software from Bentley Systems.
Bentley's software creates digital workflow between architects, engineers, and construction companies both in the office and in the field to ensure projects run smoothly and according to plan.
A lot of new infrastructure projects will come online over the next few years, and that's going to create demand for the software sold by Bentley Systems.
As requested by the president, the infrastructure bill calls for billions of dollars to be spent in updating schools and expanding broadband access to everyone in the United States. That will create enormous demand for fiber optic products, and our next stock to own in May is going to be a huge beneficiary of that demand.
Clearfield Inc. (NASDAQ: CLFD) sells pretty much everything you need to deploy a fiber network, including frames and cabinets, optical components, cable and drop assemblies, terminals and cabinets, and wall boxes.
Clearfield's customers are broadband service providers, including the large national carriers, local companies, utilities, and municipalities.
There were already huge opportunities for Clearfield from the rollout of 5G and the continued adoption of cloud computing and data centers. Add in government-mandated expansion and updates to the nation's fiber-optic grid, and business is about to go from good to great.
The latest earnings report gives some idea of just how good the business is right now. Sales were up 45% year over year while the backlog of work rose by more than 100% compared to the first quarter of 2020. Gross profit margins climbed from 39% to 43.6%. As a result of the powerful sales increase combined with margin improvement, earnings exploded from just $0.05 last year to $0.27 this year.
That's year-over-year earnings growth of more than 400%.
The fintech sector is expected to be worth $309 billion next year. And while Robinhood stock makes headlines lately, there are plenty more growth opportunities in other emerging fintech stocks.
You may or may not know this one. But it’s certainly not getting the attention it should.
Money Morning Chief Investment Strategist Shah Gilani recommends Dave.com as one of the top rising fintech stocks out there right now.
This company is not public yet. But it’s on the way to merging with VPC Impact Acquisition Holding III (NYSE: VPCC), which you can buy before the merger happens. VPC is a special purpose acquisition company (SPAC) or “blank check company” that invests in promising startups like Dave.
And Dave is promising. The company offers banking accounts and debit cards with a new spin.
The company pitches itself as a “friend” that can rely on for a small loan when you want to avoid overdrawing your account. Overdraft fees can add up – they average $33.43 in the United States – so the demand is there.
You can link a Dave account to another checking account to bump up your checking account balance with a free advance “to cover upcoming expenses up to $100.”
This $4 billion startup will eventually be listed on the NYSE when the merger is complete. In the meantime, you can buy shares of VPCC and wait for the ticker to change and the value of the stock to soar.
To help you find the best stocks to buy, Money Morning gives you insight into which stocks we see as good buys, which stocks should be avoided, and what news matters in the Dow Jones every day.
The best tech stocks to buy now are often stocks with strong upward momentum. One big benefit of buying tech stocks is how much growth potential the sector offers. Some high growth stocks may not be profitable yet are difficult to evaluate using traditional metrics. That is why looking for tech stocks that have been moving higher can be a good indicator that more people want to buy them and that they're riding a trend. A good way to examine growth and momentum is by evaluating a key piece of technical analysis called the moving average.
• Moving Average – A stock's moving average (MA) is the average closing price over a certain time period, like 20 days, 50 days, or 200 days. It's used to get a baseline for where the stock is trading that removes any short-term fluctuations. When a stock is trading above its 20- or 50-day MA, it shows good upward momentum.
Fundamentals are, simply put, data that can potentially impact the price of a company's stock. Factors included in a fundamental analysis of a company can include its management of capital, its cash flow, profit retention, funding for growth and research and development, and more.
The fundamentals of technology stocks are an important part of evaluating their potential. This is because well-established tech companies such as Google and Microsoft that boast solid fundamentals have also proven their ability to maintain leadership in their markets.
A valuable fundamental to consider is earnings per share:
• Earnings Per Share (EPS) Growth – Earnings per share refer to the company's profit divided by its outstanding shares. Strong growth in EPS means a bigger ROI. EPS growth of 25% or more over a 12-month period is a good sign.
A successful track record isn't always an indicator that a company is offering one of the best tech stocks to buy now. In addition to looking at recent earnings, it's important to consider the stock's price-to-earnings ratio (P/E).
P/E compares the price of a share in a company to its earnings per share. A high P/E means that a stock's price is expensive compared to its earnings and is potentially overvalued.
A low P/E means that a stock is cheap compared to its earnings and could be undervalued. Buying undervalued stocks is an important part of value investing. Each sector has its own "normal" P/E ratio. Tech stocks typically have high P/Es because there's high future growth anticipated.
Tech stocks can be purchased just like any other stocks. You can buy stocks in individual companies which you have studied and believe will give you a solid ROI.
Having a hard time dividing which stock is right for you? Maybe you can choose to invest in an ETF or mutual fund. By doing so, you get exposure to multiple stocks that are picked by the fund manager. Funds can be focused on IPOs, companies that give dividends, high-growth companies, specific sectors in the tech sphere, and more.
Although ETFs give you broader exposure to the tech market as a whole, owning the best technology stocks individually offers savvy investors a better chance at making more money than by simply looking into ETFs.
Investing in tech companies is popular because it is an exciting way to profit on some of the fastest growing businesses in the world. Early investors in some of the biggest tech companies have seen massive returns. For example, Amazon stock, which is now worth thousands of dollars, had an IPO of $18.
While not every stock is going to skyrocket the way Amazon has, there is still plenty of room for growth in the tech world and the opportunity for smart investors to pick stocks with a bright future.
BlackBerry stock is surging on short-squeeze hype again, but that doesn't mean everyone should rush out and buy shares.
The madness began again early this week with Blackberry shares up over 13% on Monday.
After the success of trades around GameStop (NYSE: GME) and AMC (NYSE: AMC), is BlackBerry stock the next meme to pop? .
Here’s what to look for before buying this lottery ticket…
Alphawave stock went public Thursday in London.
The company made headlines as a rare case of a North American company crossing the Atlantic for an IPO.
It went public in the midst of a notable dip in tech stocks as well.
You might think Alphawave is off-limits because it doesn’t trade on a U.S.
exchange.
That’s not exactly true.
.
This IT company is tapped into two of the hottest trends on the market right now.
But it's not just packing explosive growth potential..
It comes with a jaw-dropping dividend that keeps growing, year over year.
.
PayPal stock was one of the great success stories of the pandemic.
But as the global economy reopens, we’re seeing stocks that thrived under the pandemic start to fizzle away.
Not PayPal (NASDAQ: PYPL).
Here’s why we’re so bullish, plus our PayPal stock price prediction…
Roku stock is down 33% in the last 3 months.
Sure, this might look like a buying opportunity in so many ways.
First, the company dominated the stay-at-home stock trend, pushing the stock from $80 to $460, or 475%, within a year.
Now, with Roku stock on a hefty dip, you may feel invited to swoop right in for another quadruple return.
But don't be fooled.
The UiPath IPO was one of the largest in history.
23.9 million shares of UiPath stock sold for $1.34 billion in total, or $56 per share.
The April 21 IPO was the third-largest U.S.
software IPO ever behind the Qualtrics (NASDAQ: XM) IPO at $1.5 billion and the Snowflake (NASDAQ: SNOW) IPO of $3.4 billion.
Knowing the time after IPOs can be volatile, investors have wondered when the time to buy UiPath would come.
Before we show you when to buy UiPath stock, here's what you should know about the company.
Palantir stock has been one of the hottest stocks on the market over the last year, but you wouldn't know if by looking at its chart over the last two months.
Shares of data mining and artificial intelligence leader Palantir Technologies (NYSE: PLTR) are down nearly 50% since hitting highs in February.
That's Wall Street's special form of analytical nonsense on full display.
In 2018 alone, there were around 30 million attacks launched against U.S.
and allied interests - that number has only gone up in the meantime.
And when it comes to cyber-defense, authorities can often rely on support and cooperation from the private tech sector.
And Michael's got a tech stock for you today that will certainly benefit from the enormous $304 billion cybersecurity sector....
MicroVision stock has been on a very profitable roller coaster this year.
It's up over 1,000% since this time last year and up 182% in 2021 alone.
It's also seen three plunges over 40% since February.
It's down 44% from its all-time high right now, and that has investors wondering if MVIS is a buy right now.
If it follows the same trend, a leap higher could be next.
Before you open a position, here's what you need to know about this tech stock...
Twitter stock is one of the few social media and tech stocks that is struggling recently.
You notice this more easily when comparing Twitter to other social media companies like Facebook having a monster year.
However, remember that Mr.
Market like to exaggerate these kinds of differences.
Here is why Twitter stock is really lagging behind Big Tech, and what to expect from the stock later in the year.
The chance for a Discord IPO just went higher after the company walked away from its potential Microsoft deal.
And if Discord stock was this highly coveted by tech giants, you can bet retail investors are all over this one.
Grab stock is going public through a blockbuster, $40 billion SPAC deal.
Grab is Southeast Asia’s first “superapp,” a one-stop shop for services ranging from food delivery, ride hailing, and even financial planning.
Our technology research expert digs deeper into the company to see if the stock is a buy after the SPAC merger.
Making an early move on a stock is key in tech investing if you want to maximize your profits.
And a critical part of this strategy is knowing when to run toward a stock Wall Street's running away from.
In fact, Michael pointed out a beaten-down telemedicine firm last August that's given us gains north of 69%.
If you missed out on any of those profits, don't worry: Wall Street's making the same expensive mistake again, giving us another chance to jump in....
Airbnb stock should be one of the biggest success stories of the travel recovery, but the stock has been flat for months.
That's no surprise, according to our experts.
Here's why the stock isn't moving higher right now and when the best time to buy it will be...
Technological change is happening at breakneck speed.
That also means our data is more sensitive, and vulnerable, than ever.
CrowdStrike is solving that problem.
This is a growth stock that could be like buying Amazon in 2001.
Here's why CrowdStrike stock is a buy right now...
